Bernal and Bernal and Anor (SSAT Appeal)

[2014] FCCA 265

FEDERAL CIRCUIT COURT OF AUSTRALIA

BERNAL & BERNAL & ANOR (SSAT APPEAL) [2014] FCCA 265

Catchwords:
CHILD SUPPORT – Review of decision from SSAT – summary dismissal – no question of law disclosed in the grounds for appeal – appeal dismissed summarily.

Legislation:

Family Law Act 1975, s.79

Child Support Registrar & Crabbe & Anor [2014] FamCAFC 10
Humphries & Berry (SSAT Appeal) [2008] FMCAfam 409

Applicant: MR BERNAL

First Respondent: MS BERNAL

Second Respondent: CHILD SUPPORT REGISTRAR

File Number: BRC 9098 of 2011

Judgment of: Judge Cassidy

Hearing date: 7 February 2014

Date of Last Submission: 7 February 2014

Delivered at: Brisbane

Delivered on: 21 February 2014

REPRESENTATION

Solicitors for the Applicant: In person

Solicitors for the First Respondent: No appearance

Solicitors for the Second Respondent: Department of Human Services

ORDERS

1. That the Notice of Appeal (Child Support), filed 19 August 2013 and amended 8 November 2013, be dismissed.

IT IS NOTED that publication of this judgment under the pseudonym Bernal & Bernal & Anor (SSAT Appeal) is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT BRISBANE

BRC 9098 of 2011

MR BERNAL

Applicant

And

MS BERNAL

First Respondent

CHILD SUPPORT REGISTRAR

Second Respondent

REASONS FOR JUDGMENT

Appeal

1. This is an appeal by Mr Bernal from a decision of the Social Security Appeals Tribunal (“the Tribunal”). The application under consideration is for the appeal to be dismissed summarily. The application is made by the Child Support Registrar. The first respondent did not appear at the hearing and made no submissions in relation to the Child Support Registrar’s application.

Material

1. The material that I considered was:

   a)The amended notice of appeal filed 8 November 2013;

   b)The affidavit of Mr Bernal filed 18 August 2013; and

   c)The submissions of the second respondent filed by leave on 7 February 2014.

The Law

1. The law in relation to summary dismissal is accurately summarised in the written outline filed by the Child Support Registrar:

   “Summary Dismissal

   [14] Section 17A of the Federal Circuit Court of Australia Act 1999 (the FCCA Act) governs the summary dismissal of matters in that court. Relevantly subsection 17(A)(2)(b) provides that the Court may give judgment where it is satisfied that one party has no reasonable prospect of successfully prosecuting the proceedings.

   [15] Rule 13.10 of the Federal Circuit Court Rules 1999 provides:

   The Court may order that a proceeding be stayed, or dismissed generally or in relation to any claim for relief in the proceeding, if the Court is satisfied that:

   (a) the party prosecuting the proceeding or claim for relief has no reasonable prospect of successfully prosecuting the proceeding or claim; or

   (b) the proceeding or claim for relief is frivolous or vexatious; or

   (c) the proceeding or claim for relief is an abuse of the proceed of the Court.

   [16] The identical provision contained in section 31A of the Federal Court of Australia Act 1979 was recently considered by the High Court in Spencer v Commonwealth of Australia [2010] HCA 28; (2010) 241 CLR 118. French CJ and Gummow J stated:

   In the Federal Court and in the Court of Appeal in Queensland, the criterion of a “reasonable prospect” of success has been understood in analogous statutory settings to mean a “real” rather than “fanciful” prospect.  This exegesis adds little to the words of s 31A.  The section authorises summary disposition of proceedings on a variety of bases under its general rubric.  It will apply to the case in which the pleadings disclose no reasonable cause of action and their deficiency is incurable…

   [17] Hayne, Crennan, Kiefel and Bell JJ went on to say:

   …s 31A(3) provides that certainty of failure (“hopeless” or “bound to fail”) need not be demonstrated in order to show that a plaintiff has no reasonable prospect of prosecuting an action, it is evidence that s 31A is to be understood as requiring a different inquiry from that which had to be made under earlier procedural regimes…

   The Federal Court may exercise power under s 31A if, and only if, satisfied that there is “no reasonable prospect” of success.  Of course, it may readily be accepted that the power to dismiss an action summarily is not to be exercised lightly.  But the elucidation of what amounts to “no reasonable prospect” can best proceed in the same way as content has been given, through a succession of decided cases, to other generally expressed statutory phrases, such as the phrase “just and equitable” when it is used to identify a ground for winding up a company.  At this point in the development of the understanding of the expression and its application, it is sufficient, but important, to emphasise that the evident legislative purpose revealed by the text of the provision will be defeated if its application is read as confined to cases of a kind which fell within earlier, different, procedural regimes.”

The Appeal – Only a Question of Law

1. The Child Support Registrar has again summarised the law in relation to an appeal on a question of law:

   “Only on a question of law

   [18] The right of appeal afforded to the Applicant is pursuant to section 110B of the Collection Act and is limited to an appeal “on a question of law”.  This provision was introduced by the Child Support Legislation Amendment (Reform of the Child Support Scheme – New Formula and Other Measures) Act 2006 and is in almost identical terms to subsection 44(1) of the Administrative Appeals Tribunal Act 1975 (“AAT Act”).

   [19] His Honour Halligan FM (as he was then known), in LDME & JMA (SSAT Appeal) [2007] FMCAfam 712 recognised the connection between the two legislative schemes, observing that (at [21]) “in determining the meaning and operation of the provisions of Division 3 [of Part VIII of the Registration Act, which includes section 110B], decisions as to the meaning and operation of equivalent provisions of s 44 will provide valuable guidance.”

   [20] An appeal “on a question of law” is more limited in scope than appeal which involves a question of law.[1]  As Flick J noted in Australian Postal Corporation v Hughes [2009] FCA 1057; 50 AAR 267 in respect of the analogous provision within the AAT Act (at [7]):

   [1] see Hussain v Minister for Foreign Affairs (2008) 169 FCR 241 at [31] per Weinberg, Bennett and Edmonds JJ and the authorities cited therein.

   The jurisdiction being exercised is… constrained by the requirement that the appeal be “on a question of law”.  In Brown v Repatriation Commission (1985) 7 FCR 302 at 304, Bowen CJ, Fisher and Lockhart JJ observed in respect to this constraint:

   The existence of a question of law is not merely a qualifying condition to ground an appeal from a decision of the Tribunal; rather it and it alone is the subject matter of the appeal, and the ambit of the appeal is confined to it.

   [21] Thus, the existence of a question of law within the Applicant’s grounds of appeal is critical to the exercise of the jurisdiction of the court to hear an appeal from the SSAT.  As Kenny, Stone and Logan JJ stated in Rana v Repatriation Commission [2011] FCAFC 124 (at [11]):

   The need for a notice of appeal to specify a question of law is not just a matter of pleading.  In the absence of a question of law there is no subject matter for the appeal and the court has no jurisdiction to entertain the proceeding.

   [22] A particular question of law, which is said to arise from the decision of a tribunal, must be “stated with precision as a pure question of law.”[2] In LDME, Halligan FM echoed these observations:

   The basis and focus of a section 110B appeal is a question of law.  The appeal is not one in which findings of fact per se can be called into question (Comcare v Etheridge [2006] FCAFC 27 at [14] per Branson J, with whom Spender and Nicholson JJ agreed). The Grounds of Appeal called for in the Notice of Appeal in this Court assume the provisions of s 110B. Thus, in my view the Grounds of Appeal to be set out in the Notice of Appeal should ideally be expressed in a way that enables the respondent and the Court to identify the question or questions of law sought to be raised by the appellant and the reasons why a finding for the appellant on that question or those questions should result in the orders sought in the Notice of Appeal being made.[3]

   [23] Strict compliance with this prerequisite ensures that the merits of a case are dealt with, not by the Court, but by the Tribunal, a “distribution of function [which] is critical to the correct operation of the administrative review process.[4]

   [24] That said, regard must be had to the statutory requirements placed upon this Court to proceed with undue formality.  As Halligan FM observed:

   The eschewing of undue formality is particularly significant in matters, such as child support matters, where unrepresented litigants are a significant phenomenon.  The lack of representation of a s.44 appellant has been recognised in this Court as justifying some amelioration of the usually strict requirement in such appeals for the question of law to be stated in the Notice of Appeal (Burgess v Centrelink and Ors [2006] FMCA 1952 at [5] and [6]).

   I am therefore of the view that an unduly legalistic or pedantic approach should not be taken in analysing the grounds of appeal stated in the Notice of Appeal.  Especially with unrepresented litigants, the Court must strive to identify from the case presented whether a question of law arises that may justify the orders sought and strive, consistent with the requirements of procedural fairness, to deal with the substance of the case.” 

   [2] see Birdseye v Australian Securities and Investment Commission (2003) 76 ALD 321 at [13]-[15] per Branson and Stone JJ

   [3] LDME v JMA (SSAT Appeal) [2007] FMCAfam 712

   [4] Repatriation Commission v Owens (1996) 70 ALJR 904 at 904

Ground 1

1. The father’s Notice of Appeal (Child Support) sets out ground 1 of the appeal as follows:

   “[1] The decision made by the Social Security Appeals Tribunal was not based upon evidence available to the Tribunal at the time of the hearing.

   [1] I submitted to The Tribunal full financial disclosure.  The Tribunal recognized that the gross sales of my business for 2011/2012 were $51,064 and my expenses were $19,399.  The tribunal used these figures to calculate what my 2012/2013 taxable income would likely be.  Would it be reasonable then for The Tribunal to use those financial figures which it has recognized for 2011/2012, then to ultimately reject those figures when it came down to their decision?”

2. The only question of law issue available is the argument that there was no evidence to support the findings.  There was evidence the Tribunal relied on.  At paragraphs 21 – 24 of the decision the Tribunal recorded:

   “[21] Mr Bernal runs a [omitted] business through a company which is a trustee of a trust.  Mr Bernal agreed that for all practical purposes he is a sole operator.  He calculated that his gross income for 2012/13 was approximately $70,000 and his net income was likely to be approximately $45,000.

   [22] Mr Bernal provided the Tribunal with the business’s BAS for the first three quarters of 2012/13.  Gross sales were $54,728.  54,728 / 3 x 4 = 72,970.  Sales fluctuate from quarter to quarter.  The BAS are consistent with Mr Bernal’s evidence concerning his gross sales for 2012/13. 

   [23] The business’s gross sales for 2011/12 were $51,064.  Expenses were $19,399.  It is reasonable to assume that as sales increase, expenses will also increase.  Mr Bernal’s evidence that the business’s expenses for 2012/13 are likely to be approximately $25,000 is credible. 

   [24] Ms Bernal did not dispute Mr Bernal’s evidence concerning his net income for 2012/13.  She ultimately submitted that the Tribunal should set Mr Bernal’s adjusted taxable income at $45,000.  Having considered the documentation provided by Mr Bernal and having questioned him about his income, the Tribunal finds that Mr Bernal’s adjusted taxable income for 2012/13 is likely to be $45,000.” 

3. This ground does not disclose a question of law.  This appeal is not able to review the merits of the finding.  If there is evidence to support the outcome, no appeal lies. 

4. This appeal must fail on this ground.

Ground 2

1. The father’s Notice of Appeal (Child Support) sets out ground 2 of the appeal as follows:

   “[2] The decision was unsafe, unsound and contrary to the established legal precedents.

   [a] In change of assessment applications the SSAT is obliged by law to look at the “income, property and financial resources of each parent who is a party to the proceeding”. [Section 117(4) of the Child Support (Assessment) Act]. I was obligated to provide total financial disclosure including bank statements and credit card statements from 1 July 2012 to 31 May 2013, plus BAS statements, my 2011/2012 tax return as well as a Statement of Financial Circumstances. While I submitted full and frank disclosure, the First Respondent did not provide any banks statements, credit card statements nor her 2011/2012 tax return for the same period, thus she did not make a full and complete disclosure of her financial affairs [Humphries & Berry (2008) FMCfam 409] (sic)

   [b] The SSAT states that in matters such as a change in assessment applications where the financial position of parties is a relevant consideration, the case law provides the following guidance as to what a party’s obligations are:

   ·    A clear obligation for a party to make a full and frank disclosure of all relevant financial circumstances

   ·    The obligation extends to presenting the material in a way that shows the true nature of the person’s financial affairs and which allows those affairs to be easily understood and examined.

   The SSAT needs correct, complete and up-to-date information to enable it to make the correct or preferable decision.  Although the SSAT has the power to obtain information, the law states that the primary obligation is on the parties to make full and complete disclosure of their financial affairs [Humphries & Berry [2008] FMCAfam 409].  This is a decision of the Federal Magistrates Court (known as the Federal Circuit Court of Australia).

   [c] In The Tribunal’s decision “Grounds for Departure” paragraph 6, it refers to Subparagraph 117 (2)(b)(ia) of The Child Support Assessment Act and that it provides as a ground for departure:

   (b) that, in the special circumstances of the case, the costs of maintaining the child are significantly affected: 

   (ia) because of the special needs of the child…

   The Tribunal goes on to explain the costs of orthodontic treatment for my oldest child [X] and his need for braces.  This constitutes special circumstances as he indeed does need orthodontic treatment, though Under The Tribunal’s “Conclusion” paragraph 33, The Tribunal again revisits the issue of the orthodontic treatment which it was already addressed and established.  In doing this The Tribunal essentially “double dips” by adding on to the decision a further $1,050 Child Support increase per annum from 1 January 2013 to 31 December 2013.” 

2. In summary, the appellant’s appeal is based on:

   a)A failure of the first respondent to make full disclosure before the SSAT; and

   b)That there was a “double dip” by the decision maker in relation to the child’s braces ([X]). 

3. The SSAT is not required to ensure the parties have made full and frank disclosure.  The proposition in Humphries & Berry (SSAT Appeal) [2008] FMCAfam 409 is that if a party fails to disclose relevant material then the Tribunal can adopt the other party’s position and make findings favouring the other party.

The “Double Dipping”

1. The appellant argued before the Tribunal that the cost of the child’s braces had been taken into account in the property settlement.  This proposition was not accepted by the Tribunal.  However no question of law is raised in this ground, even if the Tribunal were in error and did double dip. 

2. I am satisfied that no error of law has been stated or demonstrated.  

3. Therefore the appeal must fail on this ground.

Ground 3

1. The father’s Notice of Appeal (Child Support) sets out ground 3 of the appeal as follows:

   “[3] The decision was manifestly unjust and inequitable and was not otherwise proper.

   [a] The decision created arrears of $4,000. The Tribunal stated that I had the capacity to pay those arrears from my property settlement money, which is in effect re-dividing the Court Orders By Consent On A Final Basis. That these orders are intended to be in full and final satisfaction of all claims between the parties at property settlement and to end all financial relationship between the parties pursuant to Section 81 of the Family Law Act, Section 90G of the Family Law Act.

   [b] In it’s decision The Tribunal adjusted my taxable income by more than 34%: from $33,562 to $45,000.  While I accept that the Family Court of Australia does not believe that the taxable income of a parent who is self employed is accurate The Tribunal has not revealed specifically or even generally how it has come to such a high adjustment percentage.  While I allow that though I have legitimate tax expenses, some of those may not be considered essential in the eyes of Child Support, though it certainly would not nearly constitute almost 41% of my total expenses (which would be $11,438 of the $19,399) as the decision of The Tribunal suggests.  The Tribunal did not raise any questions, concerns or give reason based on the evidence submitted in the form of my tax return regarding non essential expenditure.  In fact in the original decision of the Child Support Agency it was found that there were in fact no illegitimate business deductions and that there were no claims that could be added back to my profits (as per evidence document RB7).” 

2. In summary, the appellant’s objection is based on:

   a)An argument the child support arrears ordered has the effect of redividing property that had been divided by the Court orders pursuant to s.79 of the Family Law Act 1975 (Cth) (as amended) (“the FLA Act”);

   b)The Tribunal was in error in adjusting the amount to $45,000 for the appellant’s taxable income.

3. In Child Support Registrar & Crabbe & Anor [2014] FamCAFC 10, the Full Court of the Family Court helpfully summarised some of the principles from the cases that demonstrate the nature of the review:

   “[54] The following principles emerge from these authorities and have relevance to our decision as to whether the Federal Magistrate erred in his review of the SSAT decision in a manner which requires our intervention:

   ·The question of whether there is evidence to support a finding of fact or an inference drawn from findings of fact is a question of law (Al-Miahi).

   ·The making of a finding of fact or the drawing of an inference in the absence of evidence is an error of law (Al-Miahi).

   ·A wrong finding of fact is not an error of law (Al-Miahi).

   ·A finding of fact based on reasoning that is “demonstrably unsound” or on an “illogical course” or a “faulty process” of reasoning is not an error of law (Al-Miahi).

   ·Judicial review is not to be over-zealous in seeking to find inadequacy of reasoning by an administrative decision maker; the review of the reasons of an administrative decision maker must not be turned into a reconsideration of the merits of the decision (Wu Shan Liang).

   ·Section 103X(3)(b) of the Registration and Collection Act (by analogy with s 430 of the Migration Act) requires the SSAT to do no more than set out the findings which it did make on facts which it considered material to the decision which it made (Yusuf).”

4. There is no requirement anywhere that a decision in relation to child support monies to be paid cannot come from funds obtained in a s.79 (of the FLA Act) Court Order that distributes properties of the parties to the marriage. There is therefore no error of law if that is what the Tribunal did.

1. The second argument that the Tribunal’s decision to adjust the appellant’s income to $45,000, does not amount to an error of law.  The Tribunal relied on evidence before it to do this (as set out in paragraphs 21 – 24 of the Tribunal’s decision).  A finding of fact based on reasoning that is demonstrably unsound or on an “illogical course” or a “faulty process” of reasoning is not an error of law.  The appellant seems to suggest these faults with the Tribunal’s reasoning in his third ground for appeal, however they do not amount to an error of law if they did exist. 

2. This ground does not disclose a question of law. 

3. The appeal must fail on this ground.

I certify that the preceding twenty-one (21) paragraphs are a true copy of the reasons for judgment of Judge Cassidy

Date:  21 February 2014